Matter of: Brothers Construction Company, Inc. File: B-278042 Date: November 10, 1997

Matter of: Brothers Construction Company, Inc. File: B-278042 Date: November 10, 1997

DIGEST

Attorneys

DECISION

Brothers Construction Company, Inc. protests the rejection of its apparent low bid as nonresponsive for lack of a valid bid bond, under invitation for bids (IFB) No. DACW31-97-B-0050, issued by the U.S. Army Corps of Engineers, for the removal and replacement of an existing roof, and other related services, for the Dalecarlia Pumping Station located in Washington, D.C. Brothers contends that the Army unreasonably concluded that its bid bond was defective.

We deny the protest.

The solicitation required bidders to submit a bid guarantee. Brothers submitted a bid bond signed by Justin R. Klein as attorney-in-fact for Greenwich Insurance Company, the surety. Accompanying the bid bond was a power of attorney, which was divided into three parts. [1] In part I, executed by Laura A. Shanahan in her capacity as vice president of Greenwich, Justin R. Klein was appointed as attorney-in-fact, with the power to execute bonds on behalf of the company. In part II, a notary authenticated Ms. Shanahan's signature. Part III, executed by Cathy A. Hauck in her capacity as second vice president and associate general counsel of Greenwich, certified that Ms. Shanahan had authority to appoint attorneys-in-fact for the purpose of making bonds on behalf of Greenwich, and that the power of attorney was still in full force and effect. The signature on the certificate is that of Ms. Hauck, but it is a facsimile, rather than an original, signature; there also is a facsimile imprint of the corporate seal on the left side of the signature, and an original, raised corporate seal of Greenwich next to the signature at the lower right hand corner. The Corps rejected the protester's bid as nonresponsive for lack of an original signature on the power of attorney, or language stating the surety would be bound by a facsimile signature.

A bid bond, a form of bid guarantee, is designed to protect the government's interest in the event of default. A bid bond is a material requirement of an IFB with which there must be compliance at the time of bid opening; when a bid includes a defective bond, the bid itself is rendered defective and must be rejected as nonresponsive. Ray Ward Constr. Co., B-256374, June 14, 1994, 94-1 CPD Para. 367 at 2. A bond is acceptable, and the bid is responsive, only if the agency can determine definitely from the documents submitted with the bid that the bond would be enforceable against the surety should the bidder fail to meet its obligations. A bond submitted with an invalid power of attorney may render the bid nonresponsive because a power of attorney authorizes the agent to act for the principal and only a valid power of attorney would indicate that the surety expressly agreed to be bound to pay the bond signed by the attorney-in-fact. Id. In this regard, in the absence of
other evidence submitted with the bid that the surety will be bound by a
facsimile signature, a power of attorney which is submitted with a
facsimile (electronically produced, see Fiore Constr. Co., B-256429, June
23, 1994, 94-1 CPD Para. 379 at 2-3, or electronically transmitted, see
Ray Ward Constr. Co., supra, at 3-4), rather than an original, signature
is invalid, and renders a bond unacceptable. Id. at 3. A statement
included with the power of attorney that the surety fully intends to be
bound by a facsimile or mechanically reproduced signature is considered
sufficient to show the surety's intent to be bound. Id. at 4.

Brothers maintains that, even though its bond lacked an original signature
and a statement that the surety intended to be bound by a facsimile
signature, the raised corporate seal was sufficient to render the bond,
and therefore the bid, acceptable. In this regard, Brothers cites
decisions in which our Office has recognized that a raised corporate seal
is prima facie evidence of the authenticity of an instrument, and that an
instrument is the duly authorized act of the corporation. See Ray Ward
Constr. Co., supra, at 4; Daley Corp.--California Commercial Asphalt
Corp., J.V., B-274203.2, Dec. 9, 1996, 96-2 CPD Para. 217 at 4. However,
while the raised corporate seal does constitute evidence of authenticity
of a bond, it is not a substitute for a statement that the surety intends
to be bound by a facsimile signature; it does not rise to the level of an
express indication that the surety intends to be bound by the bond even
without the original signature of its authorized representative. We have
never held otherwise. In the cases cited by the protester, the powers of
attorney included language indicating that the surety would be bound by a
facsimile signature. The presence of an original corporate seal was
merely additional evidence supporting the authenticity of the power of
attorney.

We conclude that the surety's intent to be bound by the bond was not
sufficiently established in the protester's bid, and that the bid
therefore properly was rejected as nonresponsive.

The protest is denied.

Comptroller General of the United States

1. A power of attorney is evidence that the named attorney-in-fact is authorized to sign the bid bond on the surety's behalf, binding the surety to its terms.